China’s Brandy Imports Fail to Rebound Despite End of Anti-Dumping Case

China’s brandy market has yet to recover despite the government’s conclusion of its long-running anti-dumping investigation earlier this year.

In July, China’s Ministry of Commerce announced the final ruling on the anti-dumping case against European brandy, allowing some French producers to sell tax-free under a price commitment system. The decision was expected to lift confidence and unleash pent-up demand after more than a year of uncertainty.

But three months later, official customs data show the market remains in decline. Both the import volume and value of brandy fell by more than 30%, and major Cognac houses continued to report lower earnings. The policy relief failed to spark a rebound, underscoring that China’s brandy downturn is far from over.

Imports Drop 35% in the Third Quarter

According to data from Chinese Customs compiled by Vino Joy News, China imported 5,507,589 litres of brandy worth US$189.3 million in the third quarter of 2025 — down 35.1% and 35.5% respectively from a year earlier.

French brandy, primarily Cognac, remains the dominant category, accounting for 99.2% of total import value. China imported 7,902,708 litres of French brandy valued at US$187.8 million during the quarter, representing year-on-year drops of 32.2% in volume and 35.5% in value. The steep decline in Cognac shipments weighed heavily on the overall market.

Before July, China’s brandy imports had been overshadowed by the anti-dumping investigation. On Jan. 5, 2024, the Ministry of Commerce launched the probe targeting EU-origin brandy. A preliminary ruling in August 2024 confirmed dumping practices and required importers to post deposits or submit guarantees.

That uncertainty led to a sharp decline in trade in the first half of 2025, when import volume plunged 49.3% and value dropped 65.8% year-on-year. Many importers and distributors paused orders, fearing that anti-dumping duties could soon take effect and sharply increase costs.

Limited Boost From Final Ruling

The final ruling announced on July 4, 2025, confirmed that EU brandy had been sold in China at unfairly low prices but also approved a price commitment plan submitted by European industry groups. Under the agreement, 34 companies — including Rémy Martin, Martell and Hennessy — can continue selling in China without anti-dumping duties as long as they adhere to the pledged minimum prices.

Theoretically, the outcome should have brought relief to the market. China’s brandy sector is highly concentrated, with Rémy Martin, Martell and Hennessy controlling most of the mainstream segment. But the expected recovery never materialised in the third quarter.

Weak Demand and Rising Inventories

“The main reason is still weak demand this year,” said a Guangzhou-based Cognac distributor. “The overall business environment is poor, and both brandy and Cognac sales have been hit. The new drinking restrictions have made things worse. Even Moutai’s prices are falling — that says a lot.”

Cognac and brandy sales in China rely heavily on the business banquet scene in Guangdong and Fujian provinces, both of which have been badly affected by the broader economic slowdown.

Zhang Jiarong, general manager of Guangdong Rongpu Wines, said Cognac sales have been significantly weaker this summer compared with previous years. “The sluggish property market and falling home prices have eroded consumer confidence,” he said. “People are entertaining and gifting less. The new restrictions on alcohol consumption mean civil servants are avoiding drinking altogether.”

“Banquets are far less frequent now, and some consumers have switched to mid-range baijiu with sauce aroma, which is cheaper than imported spirits,” Zhang added.

Financial results from major Cognac houses echo this trend. LVMH reported that organic revenue from its Cognac and spirits division fell 12% year-on-year to €1.759 billion in the first nine months of 2025. Third-quarter revenue came in at €568 million, down 15.7% from a year earlier.

Inventory Pressure Adds to Slowdown

Industry insiders say inventory buildup has also become a drag on imports. When the investigation was first launched, many Cognac producers accelerated shipments to China to get ahead of potential trade barriers.

“From January to October last year, nearly every Cognac brand rushed to ship as much as possible to China before the anti-dumping measures took effect,” said one importer. “But the volume far exceeded actual sales. The market is still digesting that stockpile, so weak import data are only natural.”

For now, China’s brandy market shows little sign of recovery. While the policy risk has subsided, sluggish demand, excess inventory and macroeconomic headwinds continue to weigh on one of the country’s most lucrative imported spirits segments.